What are the roles of the International Monetary Fund (IMF) and the World Bank? Which of these institutions is more controversial? Why? The International Monetary Fund (IMF) was established in order to maintain the order in the international monetary system. …

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Arbitrage in Montreal What principle links the four prices? What is the relevant mathematical formulation? The relevant mathematical formulation for linking the four prices is the IRP (Interest Rate Parity) theorem: In the theorem S stand for spot rate, F …

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Define and give an example of relative purchasing power parity. Relative purchasing power parity explains the association between the two country’s inflation rates in specific period of time. The formula of relative purchasing power parity is: Are implied forward rates …

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